Australian industry leaders are entering 2024 with significantly more caution and concern than the year before, according to the latest Industry Outlook report from the Australian Industry Group (Ai Group).
The 2024 Ai Group CEO Expectations Survey sought insights from over 300 senior leaders in various sectors including manufacturing, construction, technology, and supply chain and technical services.
The survey found three challenges that will define their priorities in 2024: uncertainty, ongoing supply-side challenges, and weakening demand-side conditions.
According to the report, 40 per cent of business leaders expect weaker business conditions in 2024, while only 27 per cent expect an improvement.
Meanwhile, 38 per cent of respondents consider lack of demand their primary concern much higher than 2023’s 18 per cent.
Furthermore, the majority of businesses (80 per cent) anticipate an increase in input costs, with 34 per cent expecting it will be their largest constraint on growth.
The report also revealed that industry leaders prioritise productivity to survive in this much more difficult environment, with 52 per cent planning to focus on business process improvement and 41 per cent concentrating on staff training and development.
Meanwhile, 35 per cent intend to direct their investment to new business development.
Australian business leaders are also planning to invest in technology and innovation, focus on business improvement to better control costs, and boost efforts in upgrading the skills of their current workforce.
“These productivity-oriented strategies are very welcome, given Australia’s poor productivity performance in recent decades. They will also be instrumental in ensuring industry is best positioned to succeed in an uncertain, slowing but supply-constrained economic context,” Innes Willox, CEO of the Ai Group, said in a media release.
